This is a BC HST Price Chart that
outlines the new home HST Tax Increase and price difference for
new British Columbia and Vancouver homes. The numbers tell the
story. The BC HST Price Chart indicates that a typical new home
will end up costing anywhere between 2% more (for $100,000 home)
to more than 7% more (for $2,000,000 home) in the province come
July 1st, 2010. The BC HST Price Chart should be used as a reference
guide for any new first time homebuyer looking for the BC HST
price difference between the old system and new system.

Story Highlights

•

Contrary to what the BC Government has told the public,
the new home BC HST tax increase will affect all new homebuyers.

•

The BC HST Price Chart indicates that the total cost of
a new home in the province will cost anywhere from 2% to over
7% more than compared to the current 5% GST only system.

•

The BC HST price difference and tax increase on new homes
will have a profound influence on the Vancouver first time
homebuyers market. The extra 12% tax burden won’t be
financed by the major banks, and therefore, the BC HST tax
increase will only force many first time homebuyers out of
the new housing market.

•

With decreased demand from the BC first time homebuyers
market because of the new home HST tax increase and significant
price difference as seen in the BC HST Price Chart, there
will be a slow down in the new housing construction industry.

•

ANNOUNCEMENT on November 19, 2009: BC Government will raise
the threshold for its maximum HST rebate on new homes to $525,000
from $400,000, effectively increasing the rebate by 30 per
cent. For homes priced under $525,000, the rebate will ensure
there is no additional tax burden from the HST. Purchasers
of homes over the new threshold will pay the seven-per-cent
HST and be eligible for a maximum rebate of $26,250.

New Home HST Tax Increase – BC HST Price
Difference – Harmonized Sales Tax Numbers ChartWe have received many calls and emails
regarding the new British Columbia Harmonized Sales Tax. There
is much confusion among the general public as to how the BC HST
will affect their purchasers, and ultimately, their decisions
to buy big ticket expensive items. In the latest surveys, more
than 85% of British Columbians are against the provincial HST
tax. In many cases, it is easy for BC residents to calculate the
increase in prices due to the harmonized sales tax. Going out
to the restaurant or getting a haircut will simply cost an extra
7% as part of the HST tax burden. However, the 12% BC HST on new
homes and real estate purchases in British Columbia and Greater
Vancouver is harder to understand due to the complexities surrounding
partial HST rebates, the GST rebates and other taxes. The new
home HST tax increase is substantial and the BC HST price difference
between the current 5% GST system and the new 12% HST system are
profound. For new homebuyers in BC and Vancouver who are unsure
about the new home HST tax increase and the BC Harmonized Sales
Tax price difference in real estate, please refer to the below
HST Numbers Chart.

Remember that the ‘Other Closing
Costs’ are just estimates and for the sake of argument,
we have used $2,000 including GST for the current 5% GST system.
For the new 12% HST system, we have used $2,140 for the ‘Other
Closing Costs’ in the new home HST tax increase pricing
chart as the difference between the current and old system is
7%.

Price of Eligible
New Home(not incl. GST/HST)

Property Transfer Tax

OLD
SYSTEM (5% GST)

NEW
SYSTEM (12% HST)

NEW HOME COST INCREASE

GST
(5%)

GST
Portion
(New Housing Rebate1)

Other
Closing Costs(incl. 5% GST)

Total
Purchase Price

HST
(12%)

GST
Portion (New Housing
Rebate1)

BC
Portion(New Housing Rebate2)

Other
Closing Costs (incl. 12% HST)

Total
Purchase Price

$100,000

$1,000

$5,000

$1,800

$2,000

$106,200

$12,000

$1,800

$5,000

$2,140

$108,340

$2,140

$150,000

$1,500

$7,500

$2,700

$2,000

$158,300

$18,000

$2,700

$7,500

$2,140

$161,440

$3,140

$200,000

$2,000

$10,000

$3,600

$2,000

$210,400

$24,000

$3,600

$10,000

$2,140

$214,540

$4,140

$250,000

$3,000

$12,500

$4,500

$2,000

$263,000

$30,000

$4,500

$12,500

$2,140

$268,140

$5,140

$300,000

$4,000

$15,000

$5,400

$2,000

$315,600

$36,000

$5,400

$15,000

$2,140

$321,740

$6,140

$350,000

$5,000

$17,500

$6,300

$2,000

$368,200

$42,000

$6,300

$17,500

$2,140

$375,340

$7,140

$400,000

$6,000

$20,000

$3,150

$2,000

$424,850

$48,000

$3,150

$20,000

$2,140

$432,990

$8,140

$450,000

$7,000

$22,500

$0

$2,000

$481,500

$54,000

$0

$22,500

$2,140

$493,140

$9,140

$500,000

$8,000

$25,000

$0

$2,000

$535,000

$60,000

$0

$25,000

$2,140

$550,140

$10,140

$550,000

$9,000

$27,500

$0

$2,000

$588,500

$66,000

$0

$26,250

$2,140

$607,140

$12,390

$600,000

$10,000

$30,000

$0

$2,000

$642,000

$72,000

$0

$26,250

$2,140

$664,140

$15,890

$650,000

$11,000

$32,500

$0

$2,000

$695,500

$78,000

$0

$26,250

$2,140

$721,140

$19,390

$700,000

$12,000

$35,000

$0

$2,000

$749,000

$84,000

$0

$26,250

$2,140

$778,140

$22,890

$750,000

$13,000

$37,500

$0

$2,000

$802,500

$90,000

$0

$26,250

$2,140

$835,140

$26,390

$800,000

$14,000

$40,000

$0

$2,000

$856,000

$96,000

$0

$26,250

$2,140

$892,140

$29,890

$850,000

$15,000

$42,500

$0

$2,000

$909,500

$102,000

$0

$26,250

$2,140

$949,140

$33,390

$900,000

$16,000

$45,000

$0

$2,000

$963,000

$108,000

$0

$26,250

$2,140

$1,006,140

$36,890

$950,000

$17,000

$47,500

$0

$2,000

$1,016,500

$114,000

$0

$26,250

$2,140

$1,063,140

$40,390

$1,000,000

$18,000

$50,000

$0

$2,000

$1,070,000

$120,000

$0

$26,250

$2,140

$1,120,140

$43,890

$1,050,000

$19,000

$52,500

$0

$2,000

$1,123,500

$126,000

$0

$26,250

$2,140

$1,177,140

$47,390

$1,100,000

$20,000

$55,000

$0

$2,000

$1,177,000

$132,000

$0

$26,250

$2,140

$1,234,140

$50,890

$1,150,000

$21,000

$57,500

$0

$2,000

$1,230,500

$138,000

$0

$26,250

$2,140

$1,291,140

$54,390

$1,200,000

$22,000

$60,000

$0

$2,000

$1,284,000

$144,000

$0

$26,250

$2,140

$1,348,140

$57,890

$1,250,000

$23,000

$62,500

$0

$2,000

$1,337,500

$150,000

$0

$26,250

$2,140

$1,405,140

$61,390

$1,300,000

$24,000

$65,000

$0

$2,000

$1,391,000

$156,000

$0

$26,250

$2,140

$1,462,140

$64,890

$1,350,000

$25,000

$67,500

$0

$2,000

$1,444,500

$162,000

$0

$26,250

$2,140

$1,519,140

$68,390

$1,400,000

$26,000

$70,000

$0

$2,000

$1,498,000

$168,000

$0

$26,250

$2,140

$1,576,140

$71,890

$1,450,000

$27,000

$72,500

$0

$2,000

$1,551,500

$174,000

$0

$26,250

$2,140

$1,633,140

$75,390

$1,500,000

$28,000

$75,000

$0

$2,000

$1,605,000

$180,000

$0

$26,250

$2,140

$1,690,140

$78,890

$1,550,000

$29,000

$77,500

$0

$2,000

$1,658,500

$186,000

$0

$26,250

$2,140

$1,747,140

$82,390

$1,600,000

$30,000

$80,000

$0

$2,000

$1,712,000

$192,000

$0

$26,250

$2,140

$1,804,140

$85,890

$1,650,000

$31,000

$82,500

$0

$2,000

$1,765,500

$198,000

$0

$26,250

$2,140

$1,861,140

$89,390

$1,700,000

$32,000

$85,000

$0

$2,000

$1,819,000

$204,000

$0

$26,250

$2,140

$1,918,140

$92,890

$1,750,000

$33,000

$87,500

$0

$2,000

$1,872,500

$210,000

$0

$26,250

$2,140

$1,975,140

$96,390

$1,800,000

$34,000

$90,000

$0

$2,000

$1,926,000

$216,000

$0

$26,250

$2,140

$2,032,140

$99,890

$1,850,000

$35,000

$92,500

$0

$2,000

$1,979,500

$222,000

$0

$26,250

$2,140

$2,089,140

$103,390

$1,900,000

$36,000

$95,000

$0

$2,000

$2,033,000

$228,000

$0

$26,250

$2,140

$2,146,140

$106,890

$1,950,000

$37,000

$97,500

$0

$2,000

$2,086,500

$234,000

$0

$26,250

$2,140

$2,203,140

$110,390

$2,000,000

$38,000

$100,000

$0

$2,000

$2,140,000

$240,000

$0

$26,250

$2,140

$2,260,140

$113,890

1 In the current 5% GST system, new homebuyers in
Vancouver and British Columbia may be eligible for a one-time
federal GST Rebate. The rebate is called the GST new housing
rebate and can be completed by the homeowner themselves or by
their legal team. The GST new housing rebate is equal to 36%
(thirty six per cent) of the total 5% GST paid on the first
$350,000 (three hundred and fifty thousand dollars) of the purchase
price of a new Vancouver or BC home. For new homes between $350,000
to $400,000 (before property transfer taxes, GST and other closing
costs), the amount of the federal GST new housing rebate phases
until until it reaches zero at $450,000.

2 In the new 12% HST system, BC homebuyers of new
homes and condos will still receive the same federal GST new
housing rebate (as explained above) which is phased out when
the purchase price of a new home hits $525,000. However, for
new Vancouver and BC home buyers, they get an added HST rebate
on the British Columbia portion of the Harmonized Sales Tax
of 5% (five per cent). In other words, there is a proposed HST
rebate of 5% on the 12% HST tax for homes valued under $525,000
only. For new homes costing more than $525,000, the maximum
partical BC HST rebate is $26,250.

What Do The New Home BC HST Tax Increase Mean?
How Much Is the BC HST Price Difference on New Homes in Vancouver?
As you run through the numbers in our BC HST Chart, you will see
the differences between the Total Purchase Price in the Old System
(5% GST) and the New System (12% HST). In the far right most column,
we have calculated the New Home Cost Increase. The new home BC
HST tax increase is quite profound when you consider that home
ownership and real estate markets in British Columbia are among
the highest in Canada already. With affordability a key topic
for all residents in this province, the new home BC HST tax increase
may mean that many more people will be priced out of the property
markets, and forced to rent for a lot longer than anticipated.
The BC HST price difference is also very significant. When considering
some simple numbers such as the purchase price of a $100,000 new
condo in BC, the BC HST price difference is $2,140, which is essentially
a bit more than 2% more than the old system. When you work your
way up to the $500,000 house, the new home BC HST tax increase
stands at roughly $15,140, or 3% more, even after the HST rebate.
When you’re talking about a $1 million home, the BC HST
price difference is a whopping $50,140, which represents a 5%
increase in total purchase price of a new home in Vancouver or
BC. And the numbers get uglier as the purchase costs go up.

With the BC HST Price Difference, What Major
Impact Does That Have on First Time Homebuyers?
Although an increase in purchase price of 2 to 5% may not sound
like much, we are still talking about thousands of dollars. As
the above BC HST Price Chart outlines, the new home BC HST tax
increase is very substantial even for a small condo that costs
$300,000. Do you know of many Vancouver first time homebuyers
who can pay an extra $6,140 in BC HST on their new home upon closing?
Remember that the major banks are unlikely to finance this 12%
HST tax burden, which basically means that the first time home
buyer will need to cover the BC HST price difference. Coming up
with an extra $6,140 is tough enough, but when it comes to this
new home BC HST tax increase for first time homebuyers, it is
money out of their wallet that does not even increase the value
of their home. The implication of the BC HST price difference
and extra tax burden is that many first time homebuyer in Vancouver
and British Columbia will stay away from the new construction
housing market. The costs and the new home BC HST tax increase
for first time homebuyers is too high, forcing many purchasers
to either wait and rent for a while or to purchase resale Vancouver
property instead. The secondary effect of the new BC HST price
difference on new homes is that with fewer first time homebuyers
driving the new housing market, the construction industry is likely
to suffer. BC new housing sales and construction will drop, forcing
many people in the industry to move out of the province or to
seek alternate employment. For Vancouver first time homebuyers,
July 1st, 2010 may be the last cut off date for you to find an
affordable new home before the new BC HST tax increase takes effect.

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